Ethereum (ETH) has taken a significant hit, falling more than 8% as rumors swirl on social media suggesting that the Ethereum Foundation could face a $100 million liquidation if ETH’s price drops to $1,100.
The speculation has been running wild on the social media platform X, with traders fearing that if Ethereum’s price falls further, the Ethereum Foundation could be forced to liquidate a substantial portion of its holdings to cover debt. One user on X commented, “If the Ethereum Foundation gets liquidated at $1,100 to bottom us for the cycle, surely that ends the simulation.” Another trader added, “The Ethereum Foundation getting liquidated at $1,100 would be this year’s FTX moment.” However, the same trader also suggested that the foundation would most likely “just add collateral” if it got close to liquidation.
At the time of writing, neither the Ethereum Foundation nor its co-founders have directly addressed the rumors regarding a potential $100 million liquidation. Still, the market sentiment seems to be feeling the pressure. Over the past week, ETH has dropped nearly 10%, and in the past month, it has fallen by 28%. At press time, ETH is trading at $1,889, after briefly dipping to $1,791 on March 10. The last time ETH was below the $2,000 mark was in late 2023.
What Sparked the ETH Liquidation Rumors?
The rumors about a potential liquidation first gained traction after a significant 30,098 ETH deposit was made into a Maker vault. This wallet, which many suspected was tied to the Ethereum Foundation, raised concerns that the foundation might be preparing for a liquidation event. However, Ethereum developers like Eric.eth and Sassal.eth have denied any connection between the Ethereum Foundation and the wallet that made the deposit.
The Maker Vault in question is part of the MakerDAO ecosystem and serves as a smart contract that lets users manage collateralized debt positions. Currently, the wallet holds a total of 100,394.447 ETH, with a debt position of 78,035,224.7182 DAI and a liquidation price set at around $1,127.
Although the wallet was flagged by Arkham Intelligence as potentially linked to the Ethereum Foundation, on-chain data suggests that the wallet’s initial funding came from jonny.eth, an early Ethereum investor, not the foundation itself. The reason it was flagged as an EF wallet might stem from the 4 million DAI transfer it received from the Ethereum Foundation’s ETH Sale in May 2022.
